Critical Contrast: Gafisa (NYSE:GFA) & Brookfield Property Partners (BPY)

Gafisa (NYSE: GFA) and Brookfield Property Partners (NASDAQ:BPY) are both financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Dividends

Brookfield Property Partners pays an annual dividend of $1.18 per share and has a dividend yield of 5.5%. Gafisa does not pay a dividend. Brookfield Property Partners pays out 491.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current ratings and price targets for Gafisa and Brookfield Property Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gafisa 2 0 0 0 1.00
Brookfield Property Partners 0 2 2 0 2.50

Brookfield Property Partners has a consensus price target of $25.17, suggesting a potential upside of 17.60%. Given Brookfield Property Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Brookfield Property Partners is more favorable than Gafisa.

Profitability

This table compares Gafisa and Brookfield Property Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gafisa -195.79% -34.52% -11.97%
Brookfield Property Partners 11.89% 1.66% 0.70%

Risk & Volatility

Gafisa has a beta of 1.92, indicating that its stock price is 92% more volatile than the S&P 500. Comparatively, Brookfield Property Partners has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Valuation & Earnings

This table compares Gafisa and Brookfield Property Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gafisa $263.80 million 0.56 -$333.60 million ($20.66) -0.51
Brookfield Property Partners $5.19 billion 1.06 $660.00 million $0.24 89.17

Brookfield Property Partners has higher revenue and earnings than Gafisa. Gafisa is trading at a lower price-to-earnings ratio than Brookfield Property Partners, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

3.8% of Gafisa shares are held by institutional investors. Comparatively, 61.7% of Brookfield Property Partners shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Brookfield Property Partners beats Gafisa on 13 of the 15 factors compared between the two stocks.

About Gafisa

Gafisa S.A. is a diversified national homebuilder. The Company’s segments are Gafisa (for ventures targeted at high and medium income) and Tenda (for ventures targeted at low income). The Company’s brands include Tenda, which serves the affordable entry-level housing segments, Gafisa, which offers a range of residential options to the mid to higher income segments and Alphaville (equity method investment), which focuses on the identification, development and sale of residential communities. In addition, it provides construction services to third parties on certain developments in the Gafisa segment where it retains an equity interest. Its real estate business activities include developments for sale of residential units, land subdivisions and commercial buildings; construction services, and sale of units through its brokerage subsidiaries, Gafisa Vendas Intermediacao Imobiliaria Ltda and Gafisa Vendas in Rio de Janeiro, jointly referred to as Gafisa Vendas.

About Brookfield Property Partners

Brookfield Property Partners L.P. is a diversified global real estate company. The Company owns, operates and develops a portfolio of office, retail, multifamily, industrial, hospitality, triple net lease, self-storage and student housing assets. Its partnership is Brookfield Asset Management Inc.’s public commercial property entity and the primary vehicle through which it invests in real estate on a global basis. It operates through four segments: Core Office, Core Retail, Opportunistic and Corporate. As of December 31, 2016, its Core Office segment consisted of interests in 142 office properties totaling 99 million square feet. As of December 31, 2016, its Core Retail segment consisted of interests in 127 regional malls and urban retail properties. As of December 31, 2016, its Opportunistic segment consisted of 107 office properties comprising approximately 29 million square feet of office space in the United States, United Kingdom, Brazil and Asia.

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